Germany

Germany

BWE breathes sigh of relief at law changes

1 August 2011
by Sara Knight

GERMANY: The German wind industry has reacted with relief to last-minute changes to the Renewable Energy Act (EEG), which prevented what it considered were the worst proposals for onshore wind going through parliament.

The EEG 2012 law passed its final hurdle at the beginning of July when the Bundesrat, the upper house of parliament, waved it through. It will come into effect at the beginning of next year.

National wind-energy association Bundesverband WindEnergie (BWE) had opposed the original proposals for onshore wind, claiming they would render around 60% of a potential 3.32GW slated for installation in Germany in 2012 and 2013 economically unviable. Interventions by parliament resulted in the retention of a bonus for onshore wind turbines that supported transmission-network operation. The government had planned to end it two years early, but the bonus will now clock in at EUR0.048/kWh for turbines commissioned up to the end of 2014.

Decreasing tariff

The tariff rate for onshore wind currently decreases annually by 1%. The government had originally proposed that the rate of decrease would be 2%, but changed this to 1.5%. The rules governing the feed-in tariff have not changed. In 2012, the starting feed-in tariff rate for onshore wind will be EUR0.089/kWh and the basic rate, which kicks in from year five or later for wind stations where wind speeds are lower, will be EUR0.049/kWh.

A bonus for repowering turbines has been set at EUR0.05/kWh and restricted to replacements for wind farms commissioned before 2002. The rate slightly improves on the EUR0.048/kWh payable under the current Renewable Energy Act (EEG 2009).

For offshore wind, the starting tariff rate will be EUR0.15/kWh payable for 12 years - the same as under the EEG 2009. Alternatively, operators can choose a payment of EUR0.19/kWh for eight years. This means that investors in offshore wind can earn an 8.4% return on their investment, compared with the current 7.1%, according to calculations by consultancy KPMG.

Offshore discontent

However, the offshore sector has complained that support for offshore wind introduced in the act is still inadequate.

It had been calling for a rate of EUR0.195/kWh payable for nine years, to give a rate of return of 9.2%. They claimed this would be competitive with rates of return for offshore wind in other parts of Europe.

Offshore development has been slower than expected and the government has accounted for this by postponing the date from which the payment rate drops. Rates will now decrease by 7% a year from 2018, instead of by 5% from 2015.